Business, 12.02.2020 02:50 raiindrxp

The following passage refers to the operation of a free-market economy. Cross-out the words (in italics) which are incorrect. In a totally free-market economy, the quantities of each type of good that are bought and sold, and the amounts of factors of production (labor, land and capital) that are used, are determined by the decisions of individual households and firms through the interaction of demand and supply. In goods markets, households are suppliers / demanders and firms are suppliers / demanders. In labour markets, households are suppliers / demanders and firms are suppliers / demanders. Demand and supply are brought into balance by the effects of changes in price. If supply exceeds demand in any market (a surplus), the price will rise / fall / stay the same. This will lead to a rise in the quantity both demanded and supplied / a fall in the quantity both demanded and supplied / a rise in the quantity demanded but a fall in the quantity supplied / a rise in the quantity supplied but a fall in the quantity demanded. If, however, demand exceeds supply in any market (a shortage), the price will fall / rise / stay the same. This will lead to a fall / rise in the quantity demanded and a fall / rise in the quantity supplied. In either case the adjustment of price will ensure that demand and supply are brought into equilibrium, with any shortage or surplus being eliminated.

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The following passage refers to the operation of a free-market economy. Cross-out the words (in ital...

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